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 The preliminary reading of 48.1 fell from February's final reading
of 48.5, while the "flash" March index also showed new orders slid
for a fourth consecutive month to 46.9 — its lowest point since
July 2013, while output fell to 47.3, the lowest since September
2012.
MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> was up 0.2 percent after the China data's release
after gaining as much as 0.5 percent.
Japan's Nikkei share average bucked the trend and gained 1.3
percent.
"The concerns around China's growth are likely to remain over the
coming weeks as the slowdown in orders over the winter months and
Chinese Luna New Year filter out," Eva Lucas, market strategist at
IG in Melbourne, wrote in a note to clients.
The Australian dollar, a liquid proxy for China, fell around a
quarter of a U.S. cent after the disappointing reading.
The yuan suffered its biggest weekly drop against the dollar last
week as policymakers try to flush out hot money from the market.
Overall, appetite for risk remained somewhat suppressed as
geopolitical tensions continued to simmer after NATO's top military
commander said on Sunday Russia had built up a "very sizeable" force
on its border with Ukraine, and Moscow may have a region in another
ex-Soviet republic, Moldova, in its sights after annexing Crimea.
The euro edged away from a recent low hit against the dollar as
traders continued to recalibrate expectations around U.S. monetary
policy after Fed Chair Janet Yellen last week raised the prospect of
an earlier start to interest rate hikes.
It was $1.3788 after hitting a two-week low of $1.3749 on Thursday.
Investors snapped up the greenback last week as they swiftly brought
forward the risk of a U.S. interest rate hike early in 2015 after
Yellen surprised markets by raising the prospect of such a move.
The dollar rose 0.2 percent to 102.495 yen, with the Japanese
currency continuing to draw safe-haven bids as investors continued
to fret over the crisis in Ukraine.
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Currency markets were also keeping an eye on emergency talks between
leaders of the Group of Seven leading nations scheduled to take
place later in the session at The Hague, where the G7 will probably
discuss how to exert further pressure on Russia and at what
potential cost.
Three-month copper on the London Metal Exchange fell 0.8 percent to
$6,429.75 a tonne in wake of the China data, erasing small gains
from the previous session. <MET/L>
Spot gold dipped to $1,327.06 an ounce, still reeling from a sharp
fall triggered by Yellen's comments last Wednesday. Russia's
assurance last week that it had no plans to invade other parts of
Ukraine has also taken some of the gloss off gold. <GOL/>
Crude oil held some distance above last week's low as fresh U.S. and
European sanctions on Russia renewed fears of a supply disruption
from the world's second largest oil producer.
Brent crude traded at $106.65 a barrel with supply disruption
worries keeping it off a six-week trough of $105.41 hit on Thursday.
<O/R>
(Editing by Shri Navaratnam and Eric Meijer)
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